The quotation movements before meeting of the Federal Open Market Committee, as a rule, are hardly predictable. Especially FOMC meeting, which takes place tomorrow, will be unusual. It will be the last Committee meeting under the direction of Chairman of the Board of Governors of the Federal Reserve System and FOMC Chairman - Alan Greenspan.

Alan Greenspan is one of logical supporters of carrying out of active monetary policy. Analysts do not doubt that tomorrow the federal funds rate of the USA will be raised on 25 basic points, however many analytical agencies assume that with Greenspan’s retire FRS policy in a way of economic regulation will be more weighed and a year and a half cycle of the directed rate increase can be stopped.

At the end of week session, traders have hastened to close long positions against dollar before publication of FOMC decision about the rate. On Friday the market reacted vividly to factors, which can affect the rate changes and ignored data against it.

Quite weak US GDP data for 4 quarter have originally caused dollar falling against all currencies.

According to the report of the Bureau of Economic Analysis, U.S. Department of Commerce, preliminary data on the US Gross Domestic Product for 4 quarter have shown record drop in indicators.

On preliminary data GDP growth reduced to 1,1 % in the 4 quarter against growth of 4,1 % in the 3 quarter, having shown lower rates of growth - 2,2 % than predicted.

After publication of these data the dollar dipped 70 points to euro. However subsequently this movement has been offset, during all Friday session the dollar became stronger on more than 200 points.

Traders’ sentiment were affected by data on inflation net indicator - chain deflator and data on the housing market, that together with durable orders data have convinced players that FOMC decision would not disagree the market’s opinion and the federal funds rate would be raised on 25 basic points up to 4,5 % per annum.

Preliminary value of chain deflator except for foodstuffs and energy has increased +2.2 %, up to 3,0 % against +1.4 % in 3 quarter.

According to the US Department of Commerce New Home Sales index showed that adjusted for seasonal variations new 1 family house sales rose 2,9 % up to a level of 1,269 million houses, according to December, against a corresponding November indicator of 1,233 million houses.

Let's remind that on Thursday durable orders data showed orders growth in December above the forecasts that was promoted by rise of demand for the business equipment.

Undurable orders went up 1.3 % to $228 billion after the jump of 5.4 % in November, which was even more than was estimated originally.

These fundamental factors in aggregate, and also expectation of FRS rate increase have served as the reason for closing of long positions on the European currencies by large market makers, that, in its turn, has served as the catalyst of the euro and pound sterling falling.

A part of a position on open Longs was closed on protective stops in make-out on euro.

From the technical point of view the medium-term trend has tested a serious correction. The quotations reached a level of 1,2065 on euro, the bottom border of a currency corridor 1,2000-1,2200, to an equilibrium level.

Before FOMC meeting it is better to remain outside of the market.